Sensex surges over 490 points while Nifty tops 17,300 in early trade

The Sensex rose about 500 points in early trade on Thursday, following a strong trend in global markets following the United States’ monetary policy announcement.

In the first hour of trading, the 30-share index rose 494.12 points, or 0.86%, to 58,282.15. Likewise, the Nifty gained 122.15 points, or 0.71%, to 17,343.55.

The biggest gainer in the Sensex pack was Infosys, which rose more than 2%, followed by Bajaj Finance, HCL Tech, Tata Steel, Tech Mahindra, and NTPC. On the other hand, Maruti, Sun Pharma, HUL, and ITC were among the laggards.

Also Read| Trade Setup: Top 15 things to know before market opens on December 16, 2021

To combat increasing inflation, the US Federal Reserve announced last night that it will expedite its withdrawal of economic stimulus and possibly hike interest rates three times next year.

“A hawkish Fed sending the markets higher is rare. But this happened on Wednesday in the US, since markets were positioned for a hawkish Fed, but hawkishness itself had positive market connotations,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Also Read| Gita Gopinath suggests regulation instead of ban on cryptocurrencies

A Larger taper and three rate hikes of 25 bps each in 2022 are negative from a market perspective, but the positive news is that the Fed expects inflation to cool off.

In India markets are positioned for volatility since the short-term texture of the market is selling on the rally, dictated by relentless FII selling. This trend may persist for a few more days, he added.

The 30-share equity benchmark slid 329.06 points, or 0.57%, to close the previous session at 57,788.03, while the Nifty fell 103.50 points, or 0.60%, to 17,221.40.

Also Read| FED signals 3 rate hikes in 2022 as fight against inflation begins

According to stock exchange statistics, foreign institutional investors (FIIs) continued to be net sellers in the capital market on Wednesday, selling shares worth Rs 3,407.04 crore.

In other Asian markets, Shanghai, Tokyo, and Seoul were all up in mid-session trade, while Hong Kong was down. The overnight session on Wall Street’s stock markets finished on a bullish note.

Meanwhile, Brent crude, the international oil benchmark, increased 0.88% to USD 74.53 per barrel. In early trade, the rupee rises 6 paise to 76.26 against the US dollar.